Crafts Cataloger Creates Model for Holiday Sales

Femail Creations, a cataloger of handcrafted gifts for women, beat its forecast for the 2002 holiday sales season after tweaking a formula it used successfully during the 2001 holidays.

"Our focus was mainly on the fourth quarter this year due to the great fourth quarter we had last year," said Lisa Hammond, CEO of Femail Creations, Las Vegas. "In the midst of last year's struggling economic times we came in above plan, and during trying times our customers stuck with what they were loyal to. We wanted to capitalize on that in 2002."

Femail Creations dropped a total of 2 million 2002 holiday catalogs in mid-September, mid-October and mid-November. Each 72-page book differed only by the front cover. Femail used the three-drop approach (also with front-cover changes only) from the 2001 holidays. Then each holiday book was 64 pages, and 1.6 million copies dropped.

"We increased the page count in part because there is always so much great merchandise to choose from," she said. "From a circulation standpoint we wanted to give the response rate a boost for the fourth quarter. Our holiday response rate is a full half-percentage point up from last holiday season. And for 2002 overall, our catalog response rate is about 3 percent."

Sixty percent of catalogs went to prospects, the same as for the 2001 holidays.

Femail Creations used a different font to make the 2002 holiday catalog easier to read. It reduced the point size by half a point to make room for larger photographs, including more shots of women using or wearing items.

"It cost us more money and blew our creative budget, but it's been worth it," she said.

The 2002 holiday catalogs had 12 items per spread, down from 12.5 in 2001.

The average order is $90, up from $80 last year. Hammond said she expects the final average order to settle around $84.

"We work to find items you can't find in the mall or anywhere else," she said. "Having exclusive items, which account for 60 to 70 percent of what's in the book, is a big factor in our success."

The average price of items in the catalog is $38, up from $35 a year ago.

"This is, in part, due to the addition of a lot of personalized items that tend to be more expensive," she said. "We limited the increase because of the economy."

But she also said items are more expensive than those offered by many other catalogers and retailers because they are handcrafted and 95 percent are made in the United States.

"Handcrafted work is a category that you don't see much of because the margins aren't there," she said. "I'm paying $30 for a necklace as opposed to $5 for one made in a sweatshop in China. We typically mark up 2 to 2.5 times what was originally paid. It's been quite a process, telling customers why our necklaces are $79 while they can get a comparable one at the mall for $59."

Eighty-five percent of customers this holiday season were female, down from 90 percent in 2001.

"Men are increasingly figuring out that women don't want blenders," she said. "I get a lot of e-mails from men who say their wives, girlfriends, moms and sisters say they are a genius after shopping from our catalog."

Customers live in households with average annual incomes of about $75,000.

Thirty-five percent of orders came online during the holiday season, up from 29 percent last year.